Distinguishing XRP ETFs from Bitcoin and Ethereum Counterparts
Crypto commentator Pumpius has reignited discussion around institutional digital-asset products after claiming that a colleague within BlackRock’s digital markets division emphasized a key point the industry continues to overlook: a future XRP ETF would not belong in the same category as the current Bitcoin and Ethereum ETFs. According to him, these products perform entirely different functions, yet Wall Street continues to price them as if they are comparable. He argues that BTC and ETH ETFs are structured as speculative instruments designed to mirror price movements, while an XRP ETF would operate more like financial infrastructure woven into the plumbing of global liquidity markets.
Pumpius claims a BlackRock colleague says a future XRP ETF would be fundamentally different from BTC and ETH ETFs. He claims an XRP ETF could integrate into liquidity systems, making its growth driven by institutional usage, not trading demand. Pumpius suggests an XRP-based liquidity ETF could become a core standard in future financial plumbing.
Bitcoin and Ethereum ETFs as Speculative Instruments
In Pumpius’ view, Bitcoin and Ethereum ETFs exist for exposure, not functionality. They are tied to price cycles, volatility-driven investor entries and exits, and derivatives-backed execution. They may serve as collateral for borrowing or lending, but they lack any native settlement role within institutional finance. "These are trading vehicles," Pumpius said, adding that they do not serve as foundational components of financial systems. He stresses that BTC and ETH ETFs reflect the behavior of risk assets. Their growth is dependent on investor buying and selling, making them instruments of speculation rather than tools of market infrastructure.
An XRP ETF as a Balance-Sheet Utility
Pumpius argues that an XRP ETF would break this pattern entirely. Rather than functioning as a speculative wrapper, it could integrate directly into balance-sheet mechanics and money-market operations. He explains that an XRP ETF could participate in repo markets, support short-term liquidity management, settle tokenized U.S. Treasuries and corporate debt, and interoperate with global foreign-exchange rails. This design means the product would not simply track a price chart. Instead, it could move through sovereign-debt settlement pathways, collateral windows, and institutional liquidity channels. Pumpius describes this as the difference between an asset meant for trading and one meant for settlement and utility.
Growth Models: Speculation Versus Institutional Usage
A major theme in Pumpius’ commentary is that the market is still pricing an XRP ETF as if it would behave like Bitcoin’s. He explains that Bitcoin ETFs grow when people buy shares, and shrink when those shares are sold. The underlying value is tied almost entirely to demand from traders and institutions seeking exposure. By contrast, he argues an XRP ETF’s growth would derive from usage, not speculative flows. Assets under management could increase as institutions adopt the product for liquidity operations, collateral requirements, or large-scale settlement functions. In his words, “BTC grows when people trade it. XRP grows when institutions use it.” That difference, he claims, has yet to be fully recognized by traditional finance.
The Role of Tokenized Treasuries
Pumpius also points to the global shift toward digital sovereign debt. The IMF has already acknowledged the momentum behind tokenized Treasuries and the infrastructure needed to support them. If this transition scales, settlement rails capable of handling tokenized government debt will play a pivotal role. In such an environment, he believes the first ETF to function as a liquidity rail, rather than a speculative vehicle, would not merely outperform competitors. It could redefine the entire category. “If Treasuries become fully tokenized,” he said, “the ETF that acts as market plumbing doesn’t just win. It becomes the standard.”
Pumpius’ remarks continue to fuel speculation about whether XRP’s long-term valuation will ultimately be dictated less by hype cycles and more by its role in the architecture of future financial markets.
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A colleague in BlackRock’s digital markets team mentioned this to me privately and most people still don’t understand how fundamentally different an XRP ETF is from BTC/ETH ETFs.
— Pumpius (@pumpius) December 5, 2025
BTC/ETH ETFs = Speculative Exposure
• Price appreciation
• Collateral for borrowing/lending
•…